Launched last year, Akasa Air has capitalized on its startup advantage to formulate a low-cost structure with reduced lease rents. The post-pandemic availability of pilots has also played a key role in Akasa Air’s growth. Presently, Akasa Air operates 19 aircraft and holds a four per cent market share.
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Akasa Air, India’s youngest airline, is concocting a plan to amass a staggering $75-100 million by offering fresh shares to investors, according to insiders. The airline aims to expand its business and secure funds to honor its pre-delivery commitments for aircraft. In a previous move, Akasa had ordered a whopping 72 Boeing 737 Max, out of which 19 have already been delivered, as per the report.
Akasa Air is said to have approached private equity firms and high-net-worth individuals to raise capital. The funds will be raised with Akasa Air’s valuation at $650 million. It is reported that the US-based hedge fund PAR Capital Management is planning to bolster its holding in the airline, which currently stands at 6 per cent.
If Akasa Air’s fundraising attempt is successful, it will likely reduce the Jhunjhunwala family’s stake in the company. The family presently holds around 46 percent stake in Akasa Air. While there is no clarity on the extent of dilution of the family’s stake, it is expected that they will continue to be the largest stakeholder in the airline.
ICICI Securities predicts a bright future for Akasa Air, citing a healthy growth in traffic and a decline in jet fuel prices. Additionally, insiders reveal that the Jhunjhunwala family reserves the right of first refusal on any equity fundraising attempts by Akasa.
Launched last year, Akasa Air has capitalized on its startup advantage to formulate a low-cost structure with reduced lease rents. The post-pandemic availability of pilots has also played a key role in Akasa Air’s growth. Presently, Akasa Air operates 19 aircraft and holds a four per cent market share. CEO Vinay Dube has previously hinted at plans to order triple-digit aircraft by the end of the year.
